Consider investing in a technology that reduces your annual costs by $10,000 into perpetuity. If the annualized discount rate is 4%, then what is the present value of the benefits from investing in the technology?

$250,000

Explanation:

A perpetuity is an indefinite cashflows ; meaning they occur forever.

Formula for the present value of perpetuity  is as follows;

Present value of perpetuity = CF / rate

Recurring cashflow = 10,000

discount rate; r = 4% or 0.04 as a decimal

PV of perpetuity = 10,000/0.04

PV of perpetuity = 250,000

Therefore, the present value of the benefits from investing in the technology would be $250,000

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you will have $2593.74 in 10 years if you set aside $1,000 at 10%

you will have $9321.91 in 20 years if you set aside $2000 at 8%

you will have $1469.32 in 5 years if you set aside $1000 at 8%

you will have $1296.87 in 10 years if you set aside $500 at 10%

you will have $239.66 in 15 years if you set aside $100 at 6%

you will have $4660.96 in 20 years if you set aside $1000 at 8%